The European Commission’s High-level Expert Group on Sustainable Finance (HLEG) has named the areas it will prioritise in its policy recommendations, and plans to publish its first report to coincide with the G20 Leaders summit in July, it has said.
The 20-strong group made up of responsible investment experts from the public and private sectors was created at the end of last year to develop recommendations for how policymakers can make the European financial system more sustainable and encourage the transition to a low-carbon economy. It has now identified the following areas as focuses:
1. Adapting the investment and lending chain
For example, on fiduciary duty and duty of care, trustee readiness for sustainable investment, strategic asset allocation advice, conduct of principal-agent relationship, and ESG considerations in bank lending.
2. Systemic and sector risk
Addressing and mitigating long-term and sustainability risks: for example, through financial stability and sector specific risks.
3. Time misalignments & structural obstacles that may be hindering the connection of long time-horizon issues to recurring financial investment decisions.
4. Expanding the financial markets for sustainable assets, including growing the green bond market and the role of standards and labels.
5. Closing the investment gap, and how to orientate capital towards new sustainable investments/projects, for example through public support instruments.
6. Ensuring a shared vision and understanding
To help this, HLEG has confirmed that their interim report will be published in July, around the time of the G20 summit. The announcement comes on the back of HLEG’s latest meeting, earlier this month, which focused on “how to organise the thrust of the work, identify what further analysis is required, and decide how to communicate progress to external relevant stakeholders”. The minutes of the meeting can be found here.
HLEG is overseen by Robin Edme, who was Senior Advisor for Responsible Investment to the French Ministry of Ecology, Sustainable Development and Energy during the development of France’s Article 173 and its subsequent green bond programme.
Its chairman is Christian Thimann, Axa’s group head of regulation, sustainability and insurance foresight, and Vice-Chair of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). Investors include Magnus Billing, CEO of Swedish pension giant, Alecta, Philippe Zaouati, CEO of France’s Mirova, Michael Schmidt, a board member at Germany’s Deka Investment, Claudia Kruse, Managing Director of Global Responsible Investment and Governance at APG Asset Management, and Steve Waygood, Chief Responsible Investment Officer at Aviva Investors and also a member of the TCFD.